Distinguishable patterns of competition, collusion, and parallel action
Alternative market structures are distinguishable by the degree of parallel action exhibited by producers. We show that the correlation between output levels varies systematically with the degree of interdependence among firms, and establish an ordering among alternative behavioral hypotheses (Courn...
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| Format: | Working Paper |
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MIT Center for Energy and Environmental Policy Research
2009
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| Online Access: | http://hdl.handle.net/1721.1/44999 |
| _version_ | 1826192169839362048 |
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| author | Smith, James L. |
| author2 | Massachusetts Institute of Technology. Center for Energy and Environmental Policy Research. |
| author_facet | Massachusetts Institute of Technology. Center for Energy and Environmental Policy Research. Smith, James L. |
| author_sort | Smith, James L. |
| collection | MIT |
| description | Alternative market structures are distinguishable by the degree of parallel action exhibited by producers. We show that the correlation between output levels varies systematically with the degree of interdependence among firms, and establish an ordering among alternative behavioral hypotheses (Cournot, Stackelberg, Edgeworth/Bertrand, collusion, and perfect competition). Because the ordering is invariant to the values of background parameters, statistical tests of market conduct may be possible even when the slopes of the demand curve and marginal cost curves are unknown. An application to the world oil market finds strong evidence of collusive behavior among OPEC members, but not elsewhere. |
| first_indexed | 2024-09-23T09:07:16Z |
| format | Working Paper |
| id | mit-1721.1/44999 |
| institution | Massachusetts Institute of Technology |
| last_indexed | 2024-09-23T09:07:16Z |
| publishDate | 2009 |
| publisher | MIT Center for Energy and Environmental Policy Research |
| record_format | dspace |
| spelling | mit-1721.1/449992019-04-10T20:51:55Z Distinguishable patterns of competition, collusion, and parallel action Smith, James L. Massachusetts Institute of Technology. Center for Energy and Environmental Policy Research. Alternative market structures are distinguishable by the degree of parallel action exhibited by producers. We show that the correlation between output levels varies systematically with the degree of interdependence among firms, and establish an ordering among alternative behavioral hypotheses (Cournot, Stackelberg, Edgeworth/Bertrand, collusion, and perfect competition). Because the ordering is invariant to the values of background parameters, statistical tests of market conduct may be possible even when the slopes of the demand curve and marginal cost curves are unknown. An application to the world oil market finds strong evidence of collusive behavior among OPEC members, but not elsewhere. 2009-04-03T17:05:30Z 2009-04-03T17:05:30Z 2003 Working Paper 2003-006 http://hdl.handle.net/1721.1/44999 53192909 MIT-CEEPR (Series) ; 03-006WP. 30 p application/pdf MIT Center for Energy and Environmental Policy Research |
| spellingShingle | Smith, James L. Distinguishable patterns of competition, collusion, and parallel action |
| title | Distinguishable patterns of competition, collusion, and parallel action |
| title_full | Distinguishable patterns of competition, collusion, and parallel action |
| title_fullStr | Distinguishable patterns of competition, collusion, and parallel action |
| title_full_unstemmed | Distinguishable patterns of competition, collusion, and parallel action |
| title_short | Distinguishable patterns of competition, collusion, and parallel action |
| title_sort | distinguishable patterns of competition collusion and parallel action |
| url | http://hdl.handle.net/1721.1/44999 |
| work_keys_str_mv | AT smithjamesl distinguishablepatternsofcompetitioncollusionandparallelaction |